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Preview: Nike's Earnings

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On Thursday, March 18, Nike (NYSE:NKE) will release its latest earnings report. Check out Benzinga's preview to understand the implications.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street analysts see Nike reporting earnings of $0.76 per share on sales of $11.04 billion. Nike reported a per-share profit of $0.78 when it published results during the same quarter last year. Sales in that period totaled $10.10 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to report earnings in line when it publishes results Thursday, earnings would be down 2.56%. Revenue would be up 9.26% from the year-ago period. Here is how the Nike's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2020
EPS Estimate 0.62 0.47 0.09 0.59
EPS Actual 0.78 0.95 -0.51 0.78
Revenue Estimate 10.56 B 9.12 B 7.52 B 9.80 B
Revenue Actual 11.24 B 10.59 B 6.31 B 10.10 B

Stock Performance

For a full 12 months, the return has risen by 106.1%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Nike is scheduled to hold the call at 17:00:00 ET and can be accessed here.

 

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Posted-In: BZI-EPEarnings